New York Times Announces Metered Pay Model Coming in January 2011

New York Times executives have made their final decision: A metered pay system is coming to NYTimes.com as soon as January 2011.

The company just confirmed that NYTimes.com users will be charged a fee after a certain amount of page views per month on the site.

In December 2009, the average NYTimes.com user clicked on about 18 pages, according to internal documents. They have 17 million users, according to Nielsen Online, but some of them arrive on the site through searches or linkage. Their first few clicks on the site will be free. Fees would likely tax the Times' most engaged users, who visit day after day and refresh the site often for the latest news.

Executives have not made decisions on how much they will be charging users or how many of those clicks will be alloted before users face a paywall.

[Executives] stressed that the amount of free access could change with time, in response to economic conditions and reader demand.

“This announcement allows us to begin the thought process that’s going to answer so many of the questions that we all care about,” Arthur Sulzberger Jr., the company chairman and publisher of the newspaper, said in an interview. “We can’t get this halfway right or three-quarters of the way right. We have to get this really, really right.”

The metered model decision is “the one that after much research and study we determined has the most upside in both” subscriptions and advertising, [Martin A. Nisenholtz, senior vice president for digital operations] told the Times. “We’re trying to maximize revenue. We’re not saying we want to put this revenue stream above that revenue stream. The goal is to maximize both revenue streams in combination.”

Perez-Pena: Analysts say [NYTimes.com] is easily the leader in advertising revenue, as well. That may make it better positioned than other general-interest papers to charge — and also gives The Times more to lose if the move backfires.

The Times is building an entirely new computerized system and will take the year to build and refine the service. Once the metered model is activated, print edition subscribers will continue to have free access to NYTimes.com.

The new approach, referred to as the metered model, will offer users free access to a set number of articles per month and then charge users once they exceed that number. This will enable NYTimes.com to create a second revenue stream and preserve its robust advertising business. It will also provide the necessary flexibility to keep an appropriate ratio between free and paid content and stay connected to a search-driven Web.

Through 2010, NYTimes.com will be building a new online infrastructure designed to provide consumers with a frictionless experience across multiple platforms. Once the metered model is implemented, New York Times home delivery print subscribers will continue to have free access to NYTimes.com.

“Our new business model is designed to provide additional support for The New York Times’ extraordinary, professional journalism,” said Arthur Sulzberger, Jr., chairman of The New York Times Company and publisher of The New York Times. “Our audiences are very loyal and we believe that our readers will pay for our award-winning digital content and services.”

“This process of rethinking our business model has also been driven by our desire to achieve additional revenue diversity that will make us less susceptible to the inevitable economic cycles,” said Janet L. Robinson, president and CEO, The New York Times Company. “We were also guided by the fact that our news and information are being featured in an increasingly broad range of end-user devices and services, and our pricing plans and policies must reflect this vision.”

More details regarding the metered model will be available in the coming months.